Yahoo Finance Those Who Purchased Roots (TSE:ROOT) Shares A Year Ago Have A 65% Loss To Show For It
Taking the occasional loss comes part and parcel with investing on the stock market. Anyone who held Roots Corporation (TSE:ROOT) over the last year knows what a loser feels like. The share price has slid 65% in that time. We wouldn't rush to judgement on Roots because we don't have a long term history to look at. Shareholders have had an even rougher run lately, with the share price down 39% in the last 90 days. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.
See our latest analysis for Roots
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Unhappily, Roots had to report a 90% decline in EPS over the last year. The share price fall of 65% isn't as bad as the reduction in earnings per share. It may have been that the weak EPS was not as bad as some had feared. With a P/E ratio of 54.12, it's fair to say the market sees an EPS rebound on the cards.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. Dive deeper into the earnings by checking this interactive graph of Roots's earnings, revenue and cash flow.
A Different Perspective
While Roots shareholders are down 65% for the year, the market itself is up 1.9%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 39% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.
Roots is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
